France's Fiscal Failures Threaten Europe as Italy Debt Nears 139% of GDP
Updated
Updated · Bloomberg · Oct 7
France's Fiscal Failures Threaten Europe as Italy Debt Nears 139% of GDP
3 articles · Updated · Bloomberg · Oct 7
Summary
France’s fiscal slippage is reviving fears of bond-market contagion across Europe, with pressure spreading beyond the country at the center of the selloff.
Italy illustrates the risk: although it has cut its fiscal deficit, its recovery remains highly exposed to higher sovereign yields and borrowing costs, while debt is set to reach 139% of GDP this year.
Romania is also under strain outside the euro zone, with yields around 7.3% after political turmoil deepened when it failed to install a government on Sept. 30.
The broader concern is that even countries seen as improving their finances could be pulled into a wider European bond-market shock if France’s troubles keep lifting yields.